Jordan Nitto - Global South Florida Realtor

What is a Mortgage Rate Buydown? 🧐

A mortgage rate buydown is a strategy where a borrower pays a one-time, upfront fee in exchange for a lower interest rate on their mortgage loan. This fee, called discount points, reduces the interest rate for the life of the loan. Each discount point typically costs 1% of the mortgage amount and reduces the interest rate by 0.25%. The goal of a mortgage rate buydown is to lower monthly mortgage payments and potentially save the borrower money over the long term. ✅

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Here is some data from Freddie Mac on interest rates over the past 50 years. 📊

Yes, the current rate can seem high, especially in comparison to the record lows we saw just a few years ago. But if you zoom out and look at the longer perspective, you can see where we currently stand.

The average rate over the past 50 years is 7.75% with 18.63% being the all time high, and 2.65% being the all time low.

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